Most people need to secure a mortgage loan when purchasing a home, using the property as collateral. The terms of a mortgage loan require the borrower to make timely monthly payments in order to remain in compliance. When a borrower fails to make one or more payments, the lender may initiate foreclosure proceedings in an attempt to recover the mortgaged property. Here are some frequently asked questions regarding mortgage foreclosure:
What is the Process of Mortgage Foreclosure?
Typically, when a borrower misses several payments, the lender will send an official notification to the borrower, that has been recorded with the county, stating that they are in default of their loan agreement and are facing foreclosure. If the loan is not brought current within three months, a foreclosure date is set. The notice of sale is provided to the homeowner, posted on the property, recorded with the county and published in the local newspaper. On the established date of the trustee sale, the house is auctioned off to the highest bidder, who then receives the deed to the property.
Can Anything Be Done to Stop the Process?
If a borrower is delinquent on their payments, oftentimes the lender will offer new payment alternatives that can help them become current and avoid foreclosure. They might allow temporary partial payments, modify the original loan agreement with a lower rate or a longer repayment term, or agree to a temporary stop in payments while creating a new payment plan.
How Will a Mortgage Foreclosure Affect a Credit Report?
A mortgage loan is one of the most significant items on a credit report, so a reported foreclosure can have very damaging effects. It will decrease the likelihood of being approved for another loan or credit card, and will almost certainly result in a higher interest rate if approved. It can also make it difficult to get a job or rent an apartment, as both often require a credit check. Unfortunately, once reported, it will remain on a credit report for 7-10 years.
Is an Attorney Recommended to Help With a Foreclosure?
YES! If you are facing foreclosure and want to keep your house, you should hire an attorney as soon as possible. The earlier your attorney gets involved, the more choices are available. A lender is not required to offer repayment options, but a qualified attorney can help work out a deal or help you understand your options for bringing your loan current. Your attorney can also help ensure that the lender is legally following all of the rules, and can represent you in court or mediation.
Churchill, Quinn, Richtman & Hamilton, Ltd attorneys have successfully represented many clients throughout the foreclosure process, analyzing each specific situation to determine the best course of action. Contact us at 847-223-1500 to learn how we can help you obtain the best possible outcome to your impending foreclosure.